Q2 2012 Nashville, Tennessee Apartment Property Sales Analysis

The $112.6 million exchanged in six deals provided the second quarter with the highest single-quarter dollar investment total since the third quarter of 2010 for deals that meet Reis’ criteria. The average selling price and mean cap rate were $67,000 per unit and 7.1%. The 12-month rolling mean cap rate per quarter-end was 7.7%, down from 8.2% a year earlier. In the quarter’s largest transaction, second-largest in a year, Fireside Stoneridge LLC paid Flournoy Development Company $32.6 million ($97,024 per unit) in April for the 336-unit Stoneridge Farms at Smyrna property in southeast suburban Smyrna.

Deals since the quarter ended include Walton Street Capital’s $37.5 million (above $170,000 per unit) acquisition of the 220-unit Velocity at 320 11th Avenue S. in The Gulch, the Nashville Business Journal reported at the end of August. The property, now described as “a thriving apartment building,” was once a “beleaguered condo project.” The project’s retail space component was not included in the deal. “The sale is a testament to just how strong investor interest is in Nashville’s apartment market,” states the report. The seller, Atlanta-based Pollack Partners, paid $25.3 million for the property in 2011. Meanwhile, VR Hamptons Holdings LP paid $27.65 million for The Hamptons At Woodland Pointe near the airport, the Journal reported in a separate August report. The property sold for $20.7 million in 2004.